Library services under threat from property tax caps - 13 WTHR Indianapolis

Mary Milz/Eyewitness News

Indianapolis - The Marion County library system is cutting hours to cut costs. It's getting far less revenue due to the new property tax caps.

In November, voters across Indiana will decide whether to make those caps part of the state's constitution.

Wednesday morning the Hoosier Property Tax Reform Alliance held an event in Beech Grove encouraging voters to "vote yes on question #1."

The caps were part of a tax reform package passed by the General Assembly two years ago. It was prompted by a change in reassessment that saw many homeowner's bills double or even triple.

Speaking from her front lawn, Denise Douglas told those gathered, "Capping property taxes offers a permanent protection from out-of-control property taxes. Our family has seen over a 30% reduction in our taxes due to property tax caps."

Gov. Mitch Daniels said the caps ensured that "when local spending units want to raise money, they have to get people's permission to do it."

But some say Indiana should hold off on making the caps a constitutional amendment.

David Bottorff is the executive director of the Association of Indiana Counties.

"It my be a fantastic policy but we don't have all the information yet to know all the ramifications, so putting it in the Constitution and limiting what future General Assemblies can do is not a step we should take at this point," he said.

Bottorff said the caps often "create shifts amongst taxpayers. Local governments rely more on other sources of revenue, whether it's higher water and sewer fees or higher income taxes."

The library system has even fewer alternatives. It relies on property taxes for roughly 80% of its revenue. It decided to cut hours and close branches one day a week (two for those already closed Sundays) to save $1.5 million a year.

The Fountain Square branch will be closed Sundays and Fridays, starting October 3rd.

Kevin Shaver uses the branch "several days a week." He said he was disappointed at the reduced hours.

"It means that much less time for computer research and books," said Shaver.

He said he understood the dilemma.

"The good side about the tax caps is it helped a lot of [homeowners] but it hurt a lot of public funded things like schools and libraries," Shaver said.

The governor, who attended the Beech Grove event, was asked about the library's situation.

"They can make their case to fellow citizens for money. They can make their case to the spending authority that libraries are a higher priority than something else going on. What we want them not to be able to do is raise taxes on the Douglas family without asking permission and without limits. You can't do every single thing that well all may like to do especially in times of stress and strain," said Daniels.

Responding to the governor's comments, Bottorff said, "Libraries don't have the option of going to taxpayers and asking for more revenue. Schools have that option."

A library referendum can only be called for capital projects, not operational expenses.

Asked if that should be changed, Republican State Sen. Patricia Miller said, "That's something we can look at, certainly, but I don't think you'll find a lot of enthusiasm for tax increases right now."

Some library advocates have also suggested directing a portion of county option income tax (COIT) money toward libraries. Right now Marion County is one of just two counties out of 92 in Indiana that doesn't allow COIT money to go toward libraries. A change would require legislative approval.